by Zoe Zorka
The craft beer industry is huge right now and there are so many new breweries popping up all the time. If you’re a beer aficionado and you have mastered the art of homebrewing, you might decide that you want to get in on the action as well. You’ve got some great recipes and you think that you could beat the competition, but it’s not quite as simple as that. Making great beer at home is one thing, but if you want to scale the process up and start producing enough beer to run a business, you’ll need a lot of initial investment. So many new craft breweries fail because they don’t estimate their costs accurately and they soon run into financial problems when they realize just how expensive it all is. If you are thinking about starting your own brewery, make sure to check out this financial breakdown so you know how much money you are likely to need to get things off the ground.
The first thing that you are going to need is some brewing equipment, and you can’t just make do with the stuff that you used in your garage at home. It’s too small and you cannot manage the temperature accurately enough to make a professional product. You will need kettles, kegs, boilers, glycol chillers, fermentation tanks, and storage tanks to brew the beer. Then, once the beer is brewed, you will need bottling or canning equipment, and labelling machines as well. Finally, you will need storage to ensure that the bottles or cans are kept at the optimum temperature until they are shipped out.
If you buy second hand equipment, you can get everything you need to make a single 31 gallon barrel of beer (320 standard bottles) for around $100,000. That’s a lot of money already, and that’s only for the smallest capacity. On the other end of the spectrum, you can get a 30 barrel system but that will cost you over a million. Obviously, you are not going to go for that option, but the smallest setup can be a risk. If your business takes off and you start getting a lot of orders, you will need to scale up quickly or start turning down business because you can’t produce enough beer.
You also need somewhere to put all of your equipment, so you need to factor in the monthly rent on a large building. Then you need to cover the utility bills on top of that, and they can be very high, especially the water bill. The cost of this varies a lot depending on where you are, but if you are opening the business somewhere that has a very high cost of living, your rent is going to be excessive.
There are some other small costs that you have to consider as well, like reinforced flooring that can withstand shocks and acid from spilled beer. That can cost around $10 per square foot, which quickly adds up.
Finally, you need to cover the cost of permits and licenses, which can range from a few hundred dollars to a few thousand.
On average, you will probably need at least $250,000 to get a very small brewery up and running, but that will only cover your costs for a month or two at most. If you want to make your brewery a success, it’s important that you can bear that financial burden.
